Bail-out questions

[seebs]

Originally Posted by erimir

I don't see how money from a .25% tax can be a pretty sizable chunk of money. That's a tiny, tiny tax.

Yes. But margins are also often tiny, tiny.

I'm assuming this is a tax on total-value-of-transaction. But they have to pay it out of their margin. Their margin is not all that large.

It's far lower than sales tax. If it's a $100 billion from a .25% tax, then it comes from $40 trillion worth of transactions. They have $40 trillion of transactions a year, but $100 billion is too much money?

Compare it to their profit on those transactions, not to the total value -- because that's what it comes out of.

And yes, we would be having this conversation. Because when the choice is between getting $700 billion from Congress if they can, and getting $600 billion and supplying $100 billion themselves, you know which one they'll choose if they can get it to pass.

Maybe. If they don't have the $100 billion -- and keep in mind, the other $600 billion isn't going to them, it's going right through them into the general pool of money to transact with -- they might not have a functional choice.

It's not as though a bank handling a $100M transaction ever actually gets $100M for the deal. Their profit is not going to be $100M. Or $10M. It might not even be $1M. And out of that, $250K is enough money to hurt. And thus, a reason not to make transactions which might only make a narrow profit margin.

So what should they do? Pursue higher-risk transactions which have better returns, of course... And we know how well it works when they pursue higher-risk transactions, like sub-prime mortgages, right?

[freemonkey]

Originally Posted by erimir

Glenn Beck is gross. But he was actually tolerable there. And I agree about the bill, altho I don't think the biggest issue is the earmarks by far. But it does demonstrate the exploitation.

I don't care for him either, but yeah, he wasn't shouting and boasting and acting like an ass here. Probably because he's on someone else's show.

[erimir]

Originally Posted by seebs

Maybe. If they don't have the $100 billion -- and keep in mind, the other $600 billion isn't going to them, it's going right through them into the general pool of money to transact with -- they might not have a functional choice.

It's not as though a bank handling a $100M transaction ever actually gets $100M for the deal. Their profit is not going to be $100M. Or $10M. It might not even be $1M. And out of that, $250K is enough money to hurt. And thus, a reason not to make transactions which might only make a narrow profit margin.

So what should they do? Pursue higher-risk transactions which have better returns, of course... And we know how well it works when they pursue higher-risk transactions, like sub-prime mortgages, right?

Weren't the other people in this thread saying that pretty much every other Western country has a tax like this?

I'm not buying that other economies can handle this, but ours can't.

[Petra]

I a YouTube junkie tonight!

http://nz.

I sold stocks short and I liked it

[Dragar]

So I was wrong, the bill was passed.

On the plus, thanks American tax payers, for (maybe) bailing out the global economy!

[Zehava]

Bailout 101

Not impressed.

[California Tanker]

Originally Posted by Dingfod

Sounds just like my last automobile purchase.

Coincidently enough, a $25bn loan guarantee for the Auto industry just passed over the weekend. Not entirely sure I see the correlation between Detroit and the Afghanistan and Iraq conflicts, but anyway.

US Congress passes 25 bn loan guarantees to automakers- International Business-News-The Economic Times

NTM

[godfry n. glad]

You don't understand Detroit and the military connection?

Engines. Tanks. Hummers. Internal combustion vehicles of any kind that might have military applications.

The military/industrial complex controls a great deal of the 'job creation' in our economy. The industrial biggies, of course, have a piece of that action. Soon, we will probably have to bail Boeing and McDonnell-Douglas, too.

They are one of the reasons we are there, attempting to control the future use of the oil under their land.

Is that enough?

[freemonkey]

OK, so now the Democratically controlled Congress will be blamed for all of this, is that right?

[Freddy]

Originally Posted by yguy

Madison, the chief architect of the Constitution, had this to say to such as you:

I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.

What do you know that he didn't?

I think the following covers it.

Article I: The Legislature
Section 8 - Powers of Congress
Clause 1:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

[yguy]

Originally Posted by Freddy

I think the following covers it.

Article I: The Legislature
Section 8 - Powers of Congress
Clause 1:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

And you think Madison was ignorant of that provision?

[Sauron]

Originally Posted by yguy

And you think Madison was ignorant of that provision?

Ah, chief justice yguy - practicing cartoon constitutional law again, are we?

Several things to illuminate your trolling mind:

1. Madison authored parts of the Constitution, not all of it - before you try to connect Madison to Article I you need to prove that he, in fact, wrote it;

2. Whether Madison believed it was constitutional or not is hardly the point; the Constitution has mechanisms (amendments, court appeals, etc.) to decide questions of constitutionality. All such challenges to programs launched under "general welfare" have been failed challenges;

3. On the question of general welfare, Madison had lost an argument to Hamilton. And out of spite and stubbornness he took the position you quoted above as a direct result of losing that argument with Hamilton. Britannica:

Elected to the new House of Representatives, Madison sponsored the first 10 amendments to the Constitution—the Bill of Rights—placing emphasis in debate on freedom of religion, speech, and press. His leadership in the House, which caused the Massachusetts congressman Fisher Ames to call him “our first man,” came to an end when he split with Secretary of the Treasury Hamilton over methods of funding the war debts. Hamilton's aim was to strengthen the national government by cementing men of wealth to it; Madison sought to protect the interests of Revolutionary veterans.

Hamilton's victory turned Madison into a strict constructionist of the congressional power to appropriate for the general welfare. He denied the existence of implied power to establish a national bank to aid the Treasury. Later, as president, he asked for and obtained a bank as “almost [a] necessity” for that purpose, but he contended that it was constitutional only because Hamilton's bank had gone without constitutional challenge. Unwillingness to admit error was a lifelong characteristic. The break over funding split Congress into Madisonian and Hamiltonian factions, with Fisher Ames now calling Madison a “desperate party leader” who enforced a discipline “as severe as the Prussian.” (Madisonians turned into Jeffersonians after Jefferson, having returned from France, became secretary of state.)

Notice how Madison - while claiming that the national bank was unconstitutional - nevertheless made use of it while he was President, trying to quibble away his previous attack on Hamilton over....(wait for it): establishing a national bank, via the general welfare clause. So much for Madison taking a consistent view on the general welfare clause of the Constitution.

So your quotation from Madison above, when viewed with proper context, is actually the fruit of a bitter man seeking revenge against an enemy and cannot be viewed as his unbiased commentary on the welfare clause. Given the above, you haven't even begun to support your case.

Ah, yguy - how *little* you know about the topics you deign to pontificate upon.